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General Electric (GE) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
Gilead Sciences (GILD) closed at $69.38 in the latest trading session, marking a +1.18% move from the prior day.

In the latest trading session, General Electric (GE) closed at $10.19, marking a -0.1% move from the previous day. This change lagged the S&P 500's daily loss of 0.01%. Elsewhere, the Dow lost 0.1%, while the tech-heavy Nasdaq added 0.12%.

Coming into today, shares of the industrial conglomerate had gained 1.09% in the past month. In that same time, the Conglomerates sector gained 3.05%, while the S&P 500 gained 2.24%.

Investors will be hoping for strength from GE as it approaches its next earnings release. The company is expected to report EPS of $0.08, down 50% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $27.17 billion, down 5.21% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.55 per share and revenue of $117.69 billion, which would represent changes of -15.38% and -3.23%, respectively, from the prior year.

Any recent changes to analyst estimates for GE should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 14.59% lower. GE is currently sporting a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that GE has a Forward P/E ratio of 18.6 right now. Its industry sports an average Forward P/E of 16.7, so we one might conclude that GE is trading at a premium comparatively.

Investors should also note that GE has a PEG ratio of 4.13 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GE's industry had an average PEG ratio of 1.88 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This industry currently has a Zacks Industry Rank of 86, which puts it in the top 34% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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